Cost easing and demand sluggishness keep aluminium alloy prices in the doldrums

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Last Friday night, the aluminium alloy 2606 contract moved downwards after a higher opening, opening at RMB 23,415 per tonne, rising to a high of RMB 23,485 per tonne before pulling back in a fluctuating trend, dipping to RMB 23,380 per tonne at the close and settling at that price, down RMB 15 per tonne from the previous close, a slight decline of 0.06 per cent. Trading volume was 2,131 lots and open interest was 14,880 lots, both pulling back from previous levels, indicating weak willingness for capital participation. The intraday trend showed a pattern of fluctuating downward after hitting highs, with the closing price falling below the average price line. Short-term bullish momentum was insufficient, and prices were in the doldrums.

Spot-futures price spread daily report: According to SMM data, on April 24, the SMM ADC12 spot price had a theoretical premium of RMB 625 per tonne over the most-traded cast aluminium alloy contract (AD2606) closing price at 10:15 AM.

Warrant daily report: SHFE data showed that on April 24, total registered warrants for cast aluminium alloy stood at 30,312 tonnes, down 122 tonnes from the previous trading day. Among them, Shanghai had a total registered volume of 1,822 tonnes, unchanged from the previous trading day; Guangdong had a total registered volume of 11,029 tonnes, down 61 tonnes from the previous trading day; Jiangsu had a total registered volume of 3,721 tonnes, down 61 tonnes from the previous trading day; Zhejiang had a total registered volume of 8,691 tonnes, unchanged from the previous trading day; Chongqing had a total registered volume of 3,543 tonnes, unchanged from the previous trading day; Sichuan had a total registered volume of 1,506 tonnes, unchanged from the previous trading day.

Aluminum scrap: Last Friday, spot primary aluminium prices fell RMB 30 per tonne from the previous trading day, while aluminium scrap market prices remained generally stable. Price difference between A00 aluminium and aluminium scrap: on April 24, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was recorded at RMB 2,815 per tonne, and the price difference between A00 aluminium and shredded aluminium tense scrap was RMB 1,955 per tonne. Supply side, tightening supervision on reverse invoicing and the cancellation of tax rebates led to tight supply of compliant invoiced goods. Import side, March aluminium scrap imports reached 197,300 tonnes, up 44.75 per cent M-o-M significantly, but import traders became increasingly cautious in their purchasing sentiment due to continuously rising LME prices, and subsequent imports are expected to pull back. Demand side, the "Golden March, Silver April" peak season saw divergent production starts. The aluminium tense scrap segment purchased as needed with low inventory operations, transactions were dominated by rigid demand, and wait-and-see sentiment was strong. The wrought aluminium alloy scrap segment had some support from peak season stockpiling but with limited intensity. Overall, supply-side policy constraints are unlikely to ease in the short term, tight compliant supply combined with scrap yards holding back from selling provided support, and the increasing probability of a pullback in subsequent imports will further aggravate the tight supply situation. Demand side, the divergence between aluminium tense scrap and wrought aluminium alloy scrap downstream remained unchanged, and aluminium price fluctuations and lack of orders continued to suppress purchase willingness. In the short term, the uncertain outlook for US-Iran conflicts, tight compliant supply, and expected pullback in imported aluminium scrap volumes will support aluminium scrap prices to hold up well.

Silicon metal: On April 24, SMM east China non-oxygen blown #553 was stable from the previous day; oxygen-blown #553 was stable from the previous day; #521 was stable from the previous day; #441 was stable from the previous day; #421 was stable from the previous day; #421 for silicone use was stable from the previous day; #3303 was stable from the previous day. Individual silicon prices in north-west China were adjusted downward. Silicon prices in Huangpu Port, Tianjin, Xinjiang, Sichuan, Kunming, and Shanghai remained partially stable.

Markets outside China: Currently, ex-China ADC12 was quoted at USD 3,320-3,380 per tonne, with instant import losses continuing to remain above RMB 2,000.

Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.